Notices of Default in California for the second quarter were up about 2.4% over the comparable period in 2008. Housing Wire had the story and it’s a pretty small little data point but I thought the comment they included in their article from the President of Data Quick was worth noting.
Here is what he had to say:
“There is a perception that the housing market is dragging along bottom, that it probably won’t get much worse, and that the lenders need to get serious about processing the backlog of delinquencies, either with work-outs or foreclosure,” said DataQuick president John Walsh.
And servicers are getting serious, according to Walsh, hiring additional staff to handle the pipeline of delinquency cases. But he warned that a push in the servicing space to move these mortgages through either workout or foreclosure will likely lead to a higher volume of foreclosure filings in the third quarter.
You may not be familiar with his firm, Data Quick. They’re located in San Diego and produce some of the most complete sets of information on real estate markets in various state markets. I’ve used their products before and was always impressed with how complete and timely their data tended to be.
Throughout the bubble and its aftermath they’ve consistently called the situation as they have seen it based on their data. Never have I felt they were industry cheerleaders and by the same token I never found them to be the types that bought trouble. Just a firm with a lot of data that seems to draw pretty supportable conclusions in an unbiased manner.
Therefore, I buy their contention that we’re probably around the bottom. That doesn’t mean that were over the pain or that there won’t be a lot more foreclosures to come down the pike, just that we’ve taken the biggest hit we will likely see and now have to suffer some bumps and bruises on the way back up. And, by the way, I don’t know how far back up we go but I suspect any housing recovery is going to be pretty muted.
I doubt that residential real estate is going to contribute much to the recovery of the overall economy for some time to come. That’s a pretty important consideration as normally it is one of the drivers of recovery. At the same time, I think that we are probably past the point at which it subtracts from growth.